Comprehensive Financial Analysis of Royal Bank of Canada

This report presents a detailed financial analysis of the Royal Bank of Canada (RBC). It begins with an executive summary and table of contents, followed by an overview of the bank, its mission, and vision. The report then delves into RBC's management policies, including a SWOT analysis to assess its strengths, weaknesses, opportunities, and threats. A marketing analysis examines the bank's products, target customers, and marketing mix. The financial analysis section provides a ratio analysis to evaluate the bank's financial strength and performance over time, including an examination of net income, return on equity, and share price trends. The conclusion summarizes the key findings, emphasizing RBC's potential for future growth and its ability to provide returns to its investors. References are also included.

Running head: FINANCIAL ANALYSIS OF ROYAL BANK OF CANADA
Financial Analysis of Royal Bank of Canada
Name of the Student
Name of the University
Author’s note

1FINANCIAL ANALYSIS OF ROYAL BANK OF CANADA
Executive summary
The aim of the report is to analyse the financial strength of the company. The report gives
details of the overview of the company and the mission and vision of the bank. The report
also contains the details of marketing strategy of the company and the elaboration of the
products of the organisation. Lastly, a ratio analysis has been made which will give an idea
about the financial strength of the bank.

2FINANCIAL ANALYSIS OF ROYAL BANK OF CANADA
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Overview of the bank.................................................................................................................3
Management policy of the bank.................................................................................................3
Marketing analysis.....................................................................................................................5
Financial analysis.......................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

3FINANCIAL ANALYSIS OF ROYAL BANK OF CANADA
Introduction
Banks are the main institutes, which controls the entire economy of a country. The
performance of the banks are the indicators of the economic condition of the country. The
Royal bank of Canada being the largest bank in the country. The main motive of the bank is
to provide efficient banking service to the people of Canada and to improve the economic
condition of the country.
Discussion
Overview of the bank
The Royal bank of Canada is the largest bank in Canada by market capitalisation. At
present, the bank is giving service to more than 16 million customers and has 80000
employees to serve them. The bank was formed in the year 1864 in Halifax Nova Scotia and
it’s headquarter is situated in Toronto Ontario and in Montreal Quebec. The bank has 1209
branches all over the world to serve sixteen million customers. The bank was declared as the
largest Canadian company by revenues and market capitalisation and was ranked 50 in the
Forbes global 2000 listing. Currently the value of the bank’s assets under management is
about 673.20 billion dollars (Maiorano Mook & Quarter2017).
Management policy of the bank
The main objective of the bank is to provide service to its customers. The strategic
goals of the organisation are stated below:
To become the undisputed leader in the financial sector in Canada
To become the leading service provider of capital market wealth management and banking
services by establishing high quality of infrastructure and technology (McKeown 2017).
To understand the strategic goal of the bank it is required to make a SWOT analysis.
The SWOT analysis is a tool to get an idea about the strength , weakness that the bank have
in its internal environment and the opportunity and threat that the bank may face from the
external environment of th market (Begley Purnanandam & Zheng2017). The strength
weakness opportunity and threat of the royal bank of Canada is shown in the tabular form:

4FINANCIAL ANALYSIS OF ROYAL BANK OF CANADA
Strength
 Successfully completed merger and
acquisition with the other firms.
 Long-term presence in the market
create strong brand images.
 Successful record of
accomplishment to develop new
banking products.
 Strong network in the local and
international market.
Weakness
 The expansion strategy of the bank
has limitations, which creates
barrier in the growth of the bank.
 Efficient financial planning is not
there in the internal control system.
 The company fail to tackle the
challenges from the new entrants.
Opportunities
 New customer base generated from
the online channel.
 The economic growth in Canada has
created new opportunities for the
bank.
 Stability in the cash inflow has
given the opportunity to the bank to
invest in adjacent product segments.
Threat
 As the company operates in various
countries the currency fluctuation of
these countries, affect the business
of the bank.
 The political situation of various
countries is a challenge for the bank.
Employee benefit scheme of the company
The bank believes in the fact that it is necessary to keep the employees satisfied and in
return, the employees will effective service to the customers. The main benefits that the bank
provides to its employees are stated below
Creation of multicultural workspace
The employees of the bank enjoys the multicultural working environment in the bank.
Work life balance

5FINANCIAL ANALYSIS OF ROYAL BANK OF CANADA
The bank always look after the fact that a balance can be made between the work and
personal life of the employees. For this reason, this has made the company popular for the job
seekers (Salvioni & Gennari 2016).
Financial benefits
The banks provide various financial benefits to the employees like the employee stock
option scheme and incentives, which encourages the employees to work with more efficiency
and deliver their best potentiality (Mohsni & Otchere 2017).
Marketing analysis
Due to the long presence in the market, the bank has created a strong brand image.
The name of the bank has become a symbol of trust for the clients. The company has very
diversified product line for which it become possible for them to serve their customers
efficiently for a long period (Hoque et al 2017).
Some of the products of the bank are
 Wealth management service
 Investment banking
 Retail banking
 Cash management and foreign exchange management
 Asset based finance
 Borrowing and credit solution
The bank’s potential customers are the young and aspirants who have recently joined
their services and need financial planning and the organisations who need loan to run their
business. Some of the demographic behaviours of the clients of the bank are stated
below:
 Age : the age of the customers should be between the range of 30 to 45
 Income :the income standard should be high
 Education: highly educated
 Occupation: must be working at least at the managerial position of any reputed
company.

6FINANCIAL ANALYSIS OF ROYAL BANK OF CANADA
Psychographics behaviour includes the following
 Activities
 Value
 Lifestyle.
The bank is using the internet as the main source to reach its customers.
Marketing mix of Royal bank of Canada covers the following 4Ps
Product: the bank has diversified product mix, which makes it popular among the customers.
Price: it provide services at affordable price
Place: the huge network of the bank in all over the world has made it popular among the
customers
Promotion: the bank use its string brand image as the main promotional tool.
The major competitors of the Royal bank of Canada are mentioned below:
 Toronto dominion bank
 Bank of Nova Scotia
 Bank of Montreal
The strong brand image of the bank gives the bank the competitive advantage over the
other banks. The bank by providing efficient services to its clients competes with the other
competitors of the market.
Financial analysis

7FINANCIAL ANALYSIS OF ROYAL BANK OF CANADA
From the above financial analysis, it can be observe that the net income of the bank
increased in the last three years, which indicates that the bank is performing well in the recent
days. In the last financial year, also the profit of the bank increased. Beside that the banks
return on equity is also in an increasing trend that means that the bank is providing good
return to the shareholders.
In the last one year, the share price of royal bank of Canada has increased from 98.05
to 103.16, which means the share of the company is in an increasing trend. The current
performance of the company indicates that in future also the company will give more return
to its shareholders. Besides that, the company also give positive return on investment in the
last three years.
Conclusion
From the above discussion, it can be concluded that the royal bank of Canada has all
the potential to grow in the future and give good return to its investors. The royal bank of
Canada through its long-term presence in the market has been able to reach more customers.
The strong satisfied customer base of the bank has affected the price of the shares of the
company. The wide range of products and the effective marketing strategy of the company
has also improved the future prospect of the company.

8FINANCIAL ANALYSIS OF ROYAL BANK OF CANADA
References
Begley, T. A., Purnanandam, A., & Zheng, K. (2017). The strategic underreporting of bank
risk. The Review of Financial Studies, 30(10), 3376-3415.
Hoque, K., Earls, J., Conway, N., & Bacon, N. (2017). Union representation, collective voice
and job quality: An analysis of a survey of union members in the UK finance
sector. Economic and Industrial Democracy, 38(1), 27-50.
Maiorano, J., Mook, L., & Quarter, J. (2017). Is There a Credit Union Difference?
Comparing Canadian Credit Union and Bank Branch Locations. Canadian journal of
nonprofit and social economy research, 7(2).
McKeown, R. (2017). An overview of the Canadian banking system: 1996 to 2015 (No. 2110-
2018-4515).
Mohsni, S., & Otchere, I. (2017). Does regulatory regime matter for bank risktaking? A
comparative analysis of US and Canada. d/Seas Working Papers-ISSN 2611-
0172, 1(1), 28-28.
Salvioni, D. M., & Gennari, F. (2016). Corporate governance, ownership and
sustainability. Corporate Ownership and Control, 13(2), 606-614.